In an exclusive interview with The Tennessee Star’s Grassroots Pundit, Laura and Kevin Baigert, on Capitol Hill Wednesday, State Rep. David Hawk (R-Greeneville) explained the details of his increasingly popular Hawk Plan to fund additional road construction by reallocating 0.25 percent of the state’s 7 percent sales tax.
“We’ve had substantial over collections over the last two and a half years and looking at a third year in a row where we’re over collecting franchise and excise tax, over collecting sales tax collections. Saying that, there’s more money coming in than we had budgeted. Substantially more,” Hawk noted.
Several estimates place the current annual surplus at about $950 million.
Hawk explained that the 0.25 percent he wants to allocate comes from the 1 percent of the current 7 percent sales tax that is not specifically dedicated to particular state programs.
“I found that the last time the legislature increased the sales tax in Tennessee it went from 6 percent to 7 percent in 2002,” Hawk told the Baigerts.
‘Those dollars [collected with that extra 1 percent added to the sales tax that year] were largely unaffiliated,” Hawk explained.
“The 6 percent below had strings attached to them,” he continued.
“There was one and a half percent tied to education, a percent tied to this, a percent tied to that, but the 2002 tax increase from 6 to 7 percent are as unaffiliated dollars as we have in the state budget. Just to go wherever there is need within state government,” he noted, adding:
If we prioritize and say transportation funding is a need, then what happens if we take a quarter of one percent of those general sales tax dollars and allocate it to the transportation highway fund.
Simple as that.
“The numbers that are presented to us, somewhere between 40 and 50 percent of the fuel taxes are paid by transient, tourists, truckers, whatever that don’t reside in the state of Tennessee, would have some transient nature to them and that only 10 percent of the sales tax is attributed to that same population,” Hawk explained:
Folks are very quick to point out those percentages. What they don’t point out is that the actual numbers, the dollars generated by that 50 percent of the fuel tax is less than the 10 percent of the sales tax that the transients will spend. So, percentage wise, you can’t compare, but actual dollars that are being invested by that same transient population the dollars are more in terms of the sales taxes that those transients. So I see the sales tax just as much as a user tax a user fee a user tax whatever you want to call it as a gasoline tax or a fuel tax would be.
In response to Governor Haslam’s question Tuesday as to how we’re going to pay for everything else, Hawk responded:
That’s why we have legislative session. We delve through the Governor’s budget. We have budget hearings. We see where the dollars are being attributed. That’s how we find out if we do need to fund everything else to the level that the governor has requested and see if there’s any areas where we can do better.
Hawk made the point that “our sales tax has historically funded priorities in Tennessee and I know that we’ve been a pay as we go state in terms of transportation funding and the gas tax has been that. But, but I’m always of the opinion that just because you’ve always done something one way for the past 70 years doesn’t mean you have to go forward and do it that same way again. So, I’m looking at innovative ways.”
Hawk says his plan is revenue neutral, but has some work to do to make it budget neutral. His plan has been getting good response from constituents and legislative colleagues alike. He hopes to be able to keep it “pure,” but acknowledged that the through the “messy” legislative process, often compared to sausage making, compromises may be made to “find as many constituencies that will favor your bill.”
“We just received the budget document nine days ago,” Hawk added.
“The administration deals with the budget 12 months out of the year. We get to deal with it during the session,” he concluded.